ALI MOORE, PRESENTER: Rio Tinto's head of strategy has launched an attack on critics of Chinese investment in Australia, saying it's perverse to argue China is a nefarious force.

Doug Ritchie says the Chinalco deal remains compelling for shareholders despite the recent rally, but the company still faces a battle to convince shareholders, the public and political leaders that there's nothing to fear from Chinese investment. Neal Woolrich reports.

NEAL WOOLRICH, REPORTER: As Rio Tinto courts a $30 billion investment from Chinalco, it's fighting a public relations battle on two fronts; first, to convince the Australian public to accept more Chinese investment in the resources industry.

DOUG RITCHIE, HEAD OF GLOBAL STRATEGY, RIO TINTO: This presumption that, as I said before, that China is some monolith that does things for nefarious reasons is just so perverse.

NEAL WOOLRICH: And second, to convince its own shareholders the deal represents good value. Some have argued the recent commodity and equity market rallies make Chinalco's bid for Rio less attractive. But Doug Ritchie says that's a question for shareholders to decide in two months time.

DOUG RITCHIE: The market out there is extraordinarily volatile. There is certainly some views that would say that the equity market have run ahead of where the real economy is. And so I think - I would prefer just to not comment on the deal in that sense. It's a strong deal, it's got lots of attributes, and they've been well explained.

NEAL WOOLRICH: Doug Ritchie told a CEDA business forum in Melbourne today it's a myth that foreign investment sucks wealth out of Australia and for every dollar of income generated, only 5 cent goes overseas.

He says Japan contributed greatly to the Australian mining industry in the 70s and 80s with fears about Japanese investment eventually proving unfounded. And Mr Ritchie argues Chinese investment is likely to follow a similar course and shouldn't be feared.

DR ANDREW SToeCKEL, AUSTRALIAN NATIONAL UNIVERSITY: And because we dictate the use of assets in the country, we've got sovereignty over all the laws, we have sovereignty over the enforcement of those laws, we own the police and so on; then we get to dictate the use. So the ownership is not the issue.

NEAL WOOLRICH: The Lowy Institute's Mark Thirlwell supports foreign investment but warns that the Institute's own survey showed Chinese ownership of Australian resources faces political and public opposition.

MARK THIROLWELL, GLOBAL ECONOMIST, LOWY INSTITUTE: We also asked them should Australian authorities, officials, treat investment by foreign governments, or foreign government controlled investment different to that from private sector investors. Eighty-five per cent of those we asked either agreed for strongly agreed with that. So governments who are at the end of the day responsible to people who elected them, have to take those views into account.

NEAL WOOLRICH: But Austhink Consulting's Dr Paul Monk says Chinalco is not a commercial enterprise that's independent from the Chinese Government and when the state buys up foreign assets, it does so for strategic and geopolitical reasoning.

DR PAUL MONK, AUSTHINK CONSULTING: This is a case of a commercial entity cashed up and saying we're going to put our money on the table. It's a case of the Chinese State saying, through this arm of our global interest and resources, we're going to make this acquisition.

NEAL WOOLRICH: While Rio Tinto is looking to Chinalco for salvation, others are hosing down market hopes that China can pull the global resources industry out of its current slump. Although commodity prices have firmed in recent weeks, Alumina Limited's chief executive John Bevan told the company's annual general meeting that demand for aluminium is likely to fall 7 per cent this calendar year.

JOHN BEVAN, CEO, ALUMINA: The aluminium build up of stocks everywhere has been an issue for the globe. I think in China we are early seeing signs of demand pecking up. But overall we see that it's only getting back to the levels it was in the middle of last year.

NEAL WOOLRICH: And that's a long way from the boom times of earlier years.